MP Reynolds calls on government to suport co-operative housing

MP Jonathan Reynolds has called on the Government to offer urgent guidance to housing co-operatives, after a landmark ruling put a legal question mark over thousands of tenancy agreements.

Across the UK there are thousands of residents who live in housing schemes that are run according to a co-operative model – where co-op members collectively determine the management and maintenance of their properties.

There are fears that a ruling in the Supreme Court (Berrisford v Mexfield) could have a significant impact on the future of co-operative housing schemes.

And last night (Wed 11 July, 2012) the ‘Potential effects of the Berrisford vs Mexfield Housing Co-operative Ltd Supreme Court judgement on the future of co-operative housing in the UK’ was debated in Parliament, at the request of Stalybridge and Hyde MP Jonathan Reynolds.

Following the debate, Mr Reynolds said: “We are facing a growing housing crisis in the UK – where families can no longer rely on social housing and where it’s now harder than ever for first time buyers to step on to the housing ladder.

“Co-operative housing schemes can provide affordable, quality accommodation to residents, whilst empowering them to play a key role in decisions relating to their property.

“I believe that we should be doing all that we can to support the growth of the co-operative housing sector.

“The Berrisford v Mexfield ruling raises questions about the nature of the tenancies offered to members of co-operative housing projects.

“And the Government needs to make sure there is greater clarity to support co-operative housing projects in the wake of this ruling and in the longer term.”

During the debate Mr Reynolds outlined how the majority of the members of co-operative housing schemes are issued with ‘periodic’ tenancies, which are regularly renewed at a specific point (usually weekly or monthly) – often supplemented by a tenancy agreement, which sets out the rights of the landlord and the tenant.

However in the Berrisford v Mexfield hearing, the Supreme Court found that clauses in the co-operatives tenancy agreement - specifying particular circumstances in which the tenancy could be brought to an end - created an ‘uncertain term’.

And as no tenancy can be for an ‘uncertain term’ the Supreme Court ruled that the tenancy should be considered as a ‘tenancy for life’.

There are concerns that this decision could have potentially wide-ranging implications for co-operatives and could open the door to complex and costly legal processes. And during the debate Mr Reynolds called on the Government to assist co-operative as they try to understand the implications of the Supreme Court judgement.

“Co-operatives across the country are now scrutinising their tenancy agreements to consider what they can do to eradicate any uncertainty whilst avoiding costly legal disputes,” said Mr Reynolds following the debate.

“But currently, I understand, the only real way to determine the status of these tenancy agreements may be through the courts.

“That’s why I am calling on the Government to look closely at the implications of this court ruling and offer immediate assistance to co-operative housing organisations.

“In addition I would urge them to look at the Law – which does not yet recognise co-operative housing – to ensure there are no barriers to the growth of co-operative housing schemes in the UK.”

Last year Mr Reynolds introduced a 10-Minute Rule Bill that would recognise Co-operative Housing Tenure in Law for the first time.

Mr Reynolds argued that legal recognition would support the growth of housing co-operatives which could ease the housing crisis and enable members to build up personal equity whilst being part of the scheme.

And he believes it would help to eradicate some of the practical difficulties caused by the absence of the legal recognition of the co-operative housing model.